Here’s what it looks like when you design business around your customers

Designing a customer-centric business is all about talking to the customer, identifying pain points and incorporating feedback.

Once you have identified the problem, you need a space where everyone can focus on the issue and work together on a solution.

It’s for this reason the Commonwealth Bank’s Innovation Labs bring together businesses and customers to understand their experiences to help develop solutions to the challenge or problem faced.

“We regularly invite customers into our lab to talk about commerce, shopping and banking experiences. This helps us better understand what they are struggling with, so we can then get to work addressing these pain points,” says Michael Baumann, General Manager, Unsecured Lending and Payments, Retail Banking Services, Commonwealth Bank.

It’s not enough to identify and solve a problem for just a couple of people; it has to be more systemic. The validation process for an idea involves meetings, surveys and qualitative research. The Innovation Lab wants to put its resources where they will make the most impact for a business.

“If someone just says once there is an issue or problem as a customer, we won’t necessarily address it if it doesn’t affect the majority of customers. But if it’s a theme that comes up more often, then you start thinking about it,” says Baumann.

Once an inefficiency has been identified, and a solution proposed, then begins the process of testing with relevant stakeholders, constantly iterating the idea. When the Innovation Lab was creating an app to bring together shoppers and retailers, for example, testing started with Commonwealth Bank staff at first and gradually grew to a full-scale pilot program.

“We tested initially with 400 staff and a few retailers near our head office. We then validated hypotheses from that, and we turned to our retail industry partner Scentre Group, owners and operators of Westfield shopping centres, to further innovate and test in a live retail environment,” says Baumann.

The app allowed Commonwealth Bank customers shopping at Westfield Hornsby to opt-in on their iPhones and take advantage of tailored offers from merchants based on their shopping behaviour and location.

There were over 40 retailers who participated at Westfield Hornsby including Myer, McDonalds, Chemmart, InBloom Florists, Shores Restaurant and various food retailers within the centre.

Baumann stresses the importance of this validation process – which lasted more than a year for the shopping app, and constantly incorporated the feedback into the end product.

The Innovation Lab begins drawing on feedback even before anything has been created – using hand drawn examples of how the solution (in the above example an app) would function in the initial stages.

“You don’t need 10 million customers to validate. You don’t even need a huge amount of technology to validate,” says Baumann.

“We literally drew screens ourselves as part of the early testing of whether this was something people understood, saw value in, and would use.”

This process is something any team or company can replicate, according to Baumann. It’s all about creating a culture that aims to understand and react to the customer. It’s a journey that the Innovation Lab and the Commonwealth Bank have undertaken to embrace collaboration and agile working.

“You need to explore the inefficiencies and pain points for customers, and then you basically work with those customers to address those pain points,” says Baumann.

“You then go through an iterative process with different customer groups to see whether the solution you have come up with will reduce the friction and reduce the pain point. You continue to do this up until the point where the customer says ‘this is something that is delightful.’ Every organisation can do that.”